In September 2025, xAI, led by Elon Musk,
filed a lawsuit alleging that OpenAI had unfairly poached employees in order to obtain trade secrets from xAI. In this lawsuit, it became clear that the defendant, OpenAI, won the case.
OpenAI defeats xAI’s trade secrets lawsuit | The Verge
https://www.theverge.com/ai-artificial-intelligence/884049/openai-elon-musk-xai-trade-secrets-lawsuit
On Tuesday, February 24, 2026 (local time), OpenAI won a lawsuit filed by xAI for alleged misappropriation and theft of trade secrets.
U.S. District Judge Rita F. Lin, who presided over the lawsuit, ruled that ‘xAI has not alleged any wrongdoing by OpenAI in its current complaint,’ and ‘rather, it has pointed out eight former xAI employees who moved to OpenAI around the same time.’ He ruled that there was no indication that OpenAI had instructed former xAI employees to resign. xAI can amend and refile its complaint.
xAI alleged that two former employees who had moved to OpenAI ‘stole source code developed by xAI in preparation for their departure while in contact with OpenAI’s recruiters.’ However, Judge Lin concluded that ‘there is no allegation that the recruiters instructed them to do so.’
xAI also alleged that two former employees who had moved on to other OpenAI companies ‘kept work chats from xAI on their devices even after leaving xAI,’ another ‘refused xAI’s requests for various certifications regarding confidential information after leaving,’ one ‘unsuccessfully attempted to access xAI’s information regarding recruitment and data center optimization after starting work at OpenAI,’ and two ‘simply left xAI and joined OpenAI.’ However, the court ruled that OpenAI did not commit any illegal acts in these cases either. Judge Lin noted, ‘Notably, there are no allegations regarding OpenAI’s own conduct.’
The trade secrets theft lawsuit that OpenAI won this time is part of a messy legal dispute between OpenAI and Elon Musk, CEO of xAI and former co-founder of OpenAI. Musk is also suing Apple and OpenAI, alleging that Apple manipulates App Store rankings to prevent apps like X and Grok from reaching the top of the rankings.
by Elon Musk